Wall Street raider threatens to blow up online fashion world

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Activist investor Dan Loeb has raised expectations of an upheaval in the online high-end fashion world, after it emerged he took a stake in Richemont, owner of loss-making retailer Yoox Net-a – Wear (YNAP).

The involvement of Third Point, Mr Loeb’s investment firm, came to light weeks after Richemont alerted investors that it may be looking to get rid of YNAP.

The Switzerland-based company, which is valued at over £ 60 billion and also owns French fashion house Chloé, took control of YNAP three years ago in a $ 2.7 billion deal. euros (£ 2.3 billion) after first investing in Net-a-Porter in 2010, before it merged with competitor Yoox.

However, despite high initial hopes, YNAP and its rivals Farfetch and Matchesfashion struggled to make any comebacks amid stiff competition and pressure from powerful fashion houses who carve out the lion’s share of the profits. Last year, Richemont’s division, including YNAP, reported an operating loss of $ 223 million on sales of $ 2.2 billion.

Last month, Matchesfashion sounded the alarm bells about its ability to operate in its current form after being battered by the pandemic, and warned it could break banking conventions.

Analysts have speculated that Richemont could reduce its stake below 50%, allowing Farfetch to take a stake as a prelude to the consolidation. Alibaba, the Chinese empire of online retailers, has also been named as a potential investor in YNAP in light of its joint venture with the company in the Far East.

Jefferies Retail Analyst Flavio Cereda said, “Richemont seems to have a problem running YNAP.

“Let them sell it, form a joint venture – they have to do something to improve its performance. The market wouldn’t be upset if Richemont decided he needed some sort of solution for this.

The arrival of Third Point on the shareholder register is a rare challenge for South African President of Richemont, Johann Rupert, 71, who owns a financial stake of 9pc but controls the company through disproportionate voting rights.

Richemont is the second European corporate titan Mr Loeb, 59, has targeted in recent weeks. Last month he revealed a $ 750 million stake in Royal Dutch Shell and called for the energy giant to split up.

Third Point’s take on Richemont and the size of its investment have not been disclosed.

At the company’s annual meeting with investors in September, Mr. Rupert said of YNAP that after years of absorbing “heavy investments, we are finally seeing other parties willing and eager to share the issue. evolving platform “.

He said Richemont would notify investors later in the year. The company will release its half-year results on Friday. Mr Rupert founded Richemont in 1988 as a spin-off of Rembrandt Group Limited, a company founded by his father Anton Rupert in the early 1940s.

He admitted in May that his rival Kering, owner of Gucci, had suggested a tie-up “over a year ago,” but insisted he had no intention of selling the business.

In recent years, Richemont has had to contend with moderate performance online, at his Swiss watch company and a few of his fashion brands. Cartier has also faced stiffer competition since its French rival LVMH took over Tiffany & Co.

Richemont declined to comment. Third Point did not respond to a request for comment.


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